1997 (11) TMI 171 - AT - Central Excise

Issues Involved:
1. Applicability of concessional rate of duty under Notification 12/89-C.E. for vanaspati ghee of edible grade.
2. Interpretation of the term "inedible grade" in the context of the Notification.
3. Time bar on the demand notice.

Issue-wise Detailed Analysis:

1. Applicability of Concessional Rate of Duty:
The respondents were engaged in the manufacture of vanaspati ghee under sub-heading 1504.00 of the CETA, 1985, and availed the benefit of a concessional rate of duty of Rs. 1900/- PMT as per Notification 12/89-C.E., dated 1-3-1989. The Department contended that this concessional rate was only applicable to inedible grade products, while the respondents' product was of edible grade. The Assistant Collector confirmed the duty demand of Rs. 43,83,671.40 for the period September 1989 to February 1990. However, the lower appellate authority set aside this order, holding that the term "inedible grade" applied only to hardened technical oil, and since the respondents' product was not hardened technical oil, it was entitled to the concessional rate.

2. Interpretation of "Inedible Grade":
The Notification table during the relevant period listed:
- Sl. No. 1: Hardened technical oil (inedible grade) at Nil rate.
- Sl. No. 2: Goods other than hardened technical oil (inedible grade) at Rs. 1900/- per tonne.

The Tribunal agreed with the Department that the term "inedible grade" applied to all goods under Sl. No. 2, not just hardened technical oil. The Tribunal held that only inedible grade goods other than hardened technical oil were covered by Sl. No. 2, while Sl. No. 1 covered inedible grade hardened technical oil. The Tribunal concluded that vanaspati ghee of edible grade was not covered by Sl. No. 2 and thus not eligible for the concessional rate. This interpretation was supported by the subsequent Notification 13/90-C.E., dated 20-3-1990, which clarified that "goods other than those specified at Sl. No. 1" were eligible for the concessional rate.

3. Time Bar on the Demand Notice:
The respondents initially claimed that the demand was partly time-barred, as the show cause notice was issued on 4-4-1990 for the period September 1989 to February 1990. However, they withdrew this claim when it was pointed out that the RT 12 returns for September 1989 were filed on 5th October 1989, making the entire demand within the normal period of limitation. The Tribunal confirmed that the demand was not time-barred as it was issued within six months of the RT 12 returns.

Conclusion:
The Tribunal held that vanaspati ghee of edible grade manufactured by the respondents was not entitled to the concessional rate of duty under Sl. No. 2 of Notification 12/89. The appeal by the Revenue was allowed, and the lower appellate authority's order was set aside. The Tribunal emphasized that the term "inedible grade" governed all goods under Sl. No. 2, and the subsequent Notification 13/90 was not retrospective but clarificatory, supporting the Department's interpretation. The demand was confirmed as not time-barred.

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